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 Header Item Energy Regulation (Continued)
 Header Item Energy Security

Wednesday, 17 July 2013

Dáil Éireann Debate
Vol. 812 No. 1

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Deputy Michael Moynihan: Information on Michael Moynihan Zoom on Michael Moynihan A number of issues arise in terms of the flexibility for all businesses. Arrears is one issue and another is customers who wish to move. Issues also arise in connection with the price increase. The argument has been made in committee meetings with the energy regulator. The industry and people with small businesses have informed us that only three countries in the EU - Cyprus, Greece and Italy - had higher price increases than this country. One could ask why that is the case. It is constantly said that not enough is being done about price. We have had the argument about price increases with the regulator. The ESB is one of the major electricity producers and it has made considerable profits. It is difficult to explain the position to people who are trying to work through arrears of up to €500 when they know they could get a cost reduction by shifting their business elsewhere. There must be more flexibility within the system.

Deputy Pat Rabbitte: Information on Pat Rabbitte Zoom on Pat Rabbitte Eight suppliers operate in the electricity market and there are coincidentally eight active suppliers licensed by the regulator in the gas market. For a country our size there is certainly adequate competition, but as the Deputy fairly points out, energy prices in this country are high. That is partly because we are an isolated island that has not generated any of its own fuel in terms of oil or gas to any persistent or regular extent.

There is a practice involved of debt flagging in terms of switching providers. Switching has been significant. There must be a system of debt flagging because otherwise there is the phenomenon known as debt hopping. In other words, one accumulates arrears and then one switches to a different supplier. That must be taken on board as well and acknowledged that it is a problem. Some 250,000 customers switched their electricity supplier in 2012. They were composed of 215,000 domestic customers, 33,500 small businesses, 3,000 medium businesses and 231 large energy users. In the gas market, 110,000 customers switched, almost 17%. They were composed of 106,000 domestic customers and 3,867 business customers. There is competition.

Deputy Moynihan is correct; the profits of the supply companies seem to be large. In the case of the State companies where we have some say as shareholder, of course investment is needed to maintain the system. The capital investment in the ESB alone this year will be €888 million. It is a huge spend that does benefit the economy and whereas the profits might seem large, investment must be made in order to continue to modernise and build out the transmission system.

Energy Security

 10. Deputy Willie O'Dea Information on Willie O'Dea Zoom on Willie O'Dea asked the Minister for Communications, Energy and Natural Resources Information on Pat Rabbitte Zoom on Pat Rabbitte if his attention has been drawn to the recently published plans in the UK for energy rationing; if he foresees any such plans being required here; the long term plans he has to ensure energy security here; and if he will make a statement on the matter. [35050/13]

Deputy Pat Rabbitte: Information on Pat Rabbitte Zoom on Pat Rabbitte The energy regulator for Great Britain, Ofgem, published its most recent annual electricity capacity assessment on 27 June. It analysed security of supply in Great Britain over the forthcoming five winters. It shows that the buffer between peak demand and supply could be lower than previously expected and proposed for consultation certain measures to address this issue. This report and the associated proposed measures were publicised by elements of the British media in terms of planning for energy rationing. However, I understand that there are no plans in the UK for energy rationing. I read in a newspaper today of reports that the Government is back-tracking on its commitments in the national broadband plan.

Deputy Michael Moynihan: Information on Michael Moynihan Zoom on Michael Moynihan Yes.

Deputy Pat Rabbitte: Information on Pat Rabbitte Zoom on Pat Rabbitte I assure the House that there is no basis for such reportage, nor is it true in this case that there is rationing planned for the UK.

In contrast, the latest, All-Island Generation Capacity Statement for 2013-22, published in January this year, forecast that the adequacy situation in this country is positive for the next ten years. Indeed there is a considerable generation surplus forecast for the Irish electricity system. In terms of long term plans for energy security, Ireland’s approach is to diversify fuels and supply sources. The use of indigenous gas and access to gas and liquefied natural gas storage will enhance diversity. Continuing to develop indigenous renewable electricity is also a key strategy in ensuring supply diversity and supports are in place to ensure we attain our 2020 target of having 40% of electricity generated from renewable sources.

The network companies, ESB Networks, EirGrid, BGE and Gaslink, will continue to improve the resilience of our electricity and gas networks in their development plans. These actions will continue to enhance our long term energy security. Moreover, the Sustainable Energy Authority of Ireland, funded and assisted by my Department has, over the past decade, been very proactive in maximising energy efficiency. Several successful initiatives have been undertaken and continue. New initiatives are also being considered which will further improve the efficiency of energy consumption. As well as enhancing long term energy security, we must be mindful of the potential for unexpected short-term disruption to energy supplies and in that regard there are detailed operational plans in place. In the unlikely event of a major disruption EirGrid and Gaslink would implement their respective emergency plans to deal with the situation.

Deputy Michael Moynihan: Information on Michael Moynihan Zoom on Michael Moynihan Although the Minister said in his reply that nothing could be further from the truth, when one reads the article and the reference to preparing for energy rationalisation-----

Deputy Pat Rabbitte: Information on Pat Rabbitte Zoom on Pat Rabbitte We are at cross-purposes. Deputy Moynihan referred to rationalisation but he meant rationing.

Deputy Michael Moynihan: Information on Michael Moynihan Zoom on Michael Moynihan Yes. I beg the Minister’s pardon. A couple of issues arise. Are any energy shortage shocks foreseen in the short term or long term in the information received by the Minister from the various bodies? How strenuous have the stress tests been that have taken place? Is the Minister satisfied that the sale of Bord Gáis will not create any difficulty for the energy market in the short, medium or long term?

Deputy Pat Rabbitte: Information on Pat Rabbitte Zoom on Pat Rabbitte Touch wood, but I think I can give the Deputy the assurance he seeks in the sense that no such circumstances are envisaged. That said, we are at the end of the pipeline. We are a remote island on the verge of Europe and we saw what happened only a couple of winters’ ago when Russia turned off the pipeline. The Deputy is asking me to look into a crystal ball. In terms of our capacity to meet market demand at the moment and for the foreseeable future, unless there were some kind of cataclysmic event affecting supply from the neighbouring island, no such set of circumstances are foreseen.

I can assure the Deputy that in respect of the privatisation of the energy division of Bord Gáis Éireann, it should have no impact on security of supply because the State will retain ownership and control of the networks in this country, even if Bord Gáis Éireann has a different name at that time. That ought not to be an issue.


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